Aaron Carroll, at The Incidental Economist, is fired up about a new article in the Archives of Internal Medicine [subscribers only] that purports to demonstrate how drug companies maintain their dominance in certain markets, even when generic drugs become available.

The standard dance, as documented in the article, goes like this: Company A (Abbott Labs, here) has the exclusive right to a profitable drug (fenofibrate, or Tricor-1, which fights cholesterol). Company B asserts the right to make a generic version, and Company A pushes back legally. As the litigation grinds on, Company A comes up with a slightly modified version of the original drug — perhaps changing the dosage, perhaps making a capsule into a tablet — one that’s no more effective than the original and which it now, again, has exclusive rights to. By the time the generic comes out, everyone has switched to the new drug (Tricor-2, in this case), so there’s little demand for the cheaper drug. And when someone wants to make a generic Tricor-2? Yes, you repeat the process….

Biographies

Gary Rosen is the editor of Review and the former managing editor of Commentary magazine. His articles and reviews have appeared in the Wall Street Journal, New York Times, Washington Post, and Los Angeles Times. He is the author of "American Compact: James Madison and the Problem of Founding" and the editor of "The Right War? The Conservative Debate on Iraq."